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Topic_03_E2 - Topic 3 Exercise 2 Electronic Markets One of...

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Topic 3, Exercise 2 Electronic Markets One of the key features of financial markets is to bring investors and issuers of securities together in an efficient fashion. With the advent of technology, more and more market activity is being done electronically. There are numerous active electronic systems in the equity markets. Electronic markets have been a little slower to develop in the debt markets, although formation of new electronic markets has been growing at a rapid rate in the last few years. Electronic markets can be used for both primary market sales and secondary market sales. In a primary market sale, the issuing firm initially sells the security and receives the funds from the sale. In a secondary market sale, an investor decides to sell the security and sells it to another investor. The sale does not involve the issuer directly. The existence of secondary markets makes it easier and less expensive for issuers to sell their securities.
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